The cost of insurance for businesses and voluntary groups continues to rise despite reductions in the value of certain personal injury awards introduced earlier this year, a new survey has found.
The Alliance for Insurance Reform says recent insurance renewal costs are up 15% on average, despite the changes made by the Judicial Council being put in place in April.
The organisation has been carrying out an ongoing survey of insurance costs since the new personal injury guidelines took effect, with over 380 businesses responding.
While respondents reported private motor insurance renewals fell on average by 10%, there were substantial increases in charges on commercial policies.
Homecare businesses have seen the biggest increases in premiums, up 122%, while nursing homes have seen their insurance costs rise 35%.
The results also show that hospitality premiums are up 9%, even though many providers have been operating at reduced capacity or have been closed for much of the period.
A related survey of 74 members by the umbrella body for the community, voluntary and charity sector, The Wheel, found nearly half of its members saw their liability premiums increased by more than 10%.
Last week, the Personal Injuries Assessment Board said its average awards since the new guidelines came into effect had dropped by 40% compared to last year.
But the Alliance claims the benefit from this, as well as a reduction of liability related personal injury claims over the past decade, the commencement of the Perjury Act, the opening of Garda Insurance Fraud Office and hugely reduced claims in the last two years due to less economic activity, has not yet been passed on to customers.
“Everything is being done to facilitate affordable insurance,” said Tracy Sheridan, owner of Kidspace play centres and director of the Alliance.
“And yet we still see premiums increasing.”
The Alliance has called on the Government to urgently act to boost competition by getting more underwriters into the market.
It also claims a range of other reforms need to be carried through on, including by rebalancing the duty of care, reforming PIAB and establishing a publicly-owned fraud database.
Last week the Tánaiste said he expected the drop in personal injury award levels would be reflected in reduced premiums for individuals, businesses and volunteer groups.
He added that the Government will continue to work with the insurance sector to make sure this is the case.
Insurance Ireland said today that the market for Employers Liability and Public Liability has been loss making for a number of years and remains very challenging.
“The reality is that the number of insurers providing El and PL cover in the Irish market has been reducing because of these challenges,” Insurance Ireland said.
“The reductions in claims pay outs announced by PIAB following the introduction of the new Judicial Guidelines on Personal Injuries are very welcome, but they are relevant only to the PIAB cases and we don’t yet know the impact on claims that are being litigated through the Courts,” said Moyagh Murdock, CEO of Insurance Ireland.
“The Public Liability and Employer’s Liability insurance market remains very challenging in Ireland and needs to be more attractive in order to attract more competition,” Ms Murdock said.
She also said it is essential that, apart from the introduction of the Judicial Guidelines earlier this year, the other measures in the Action Plan for Insurance Reform are progressed.
These include the strengthening of the powers of PIAB, the rebalancing of the duty of care between business and the citizen, and increasing competition in the market.
“It is particularly crucial that we see a strengthening of PIAB’s ability to settle cases so that fewer claims go to the Courts, where the legal costs add so much to the overall cost of settling claims,” Ms Murdock added.
